Nationalised Dutch bank posts huge loss
Dutch bank SNS Reaal posted a huge loss of 972 million euros ($1.27 billion) for 2012 on Thursday hit by its deeply distressed property subsidiary that led to its nationalisation earlier this year.
The banking and insurance group, the Netherlands fourth-biggest, also posted an even greater a first quarter loss of 1.6 billion euros after it was nationalised in February to avert a threat to the Dutch financial system.
The takeover was an embarrassment to the Netherlands government, whose finance minister, Jeroen Dijsselbloem is also the head of the Eurogroup and has argued a hard line against struggling banks in crisis-hit countries such as Cyprus and Spain.
SNS Reaal has suffered recurring losses in recent years linked to its Property Finance subsidiary, bought from ABN Amro bank in 2006. The bank was otherwise in relatively good health.
The group on Thursday posted 2012 losses of 972 million euros, including "a substantial loss of 813 million euros at property finance due to sharply higher loan impairments in 2012," a statement said.
The group reported a loss of 1.6 billion euros in the first quarter of 2013 "due to additional provision for real estate finance portfolio of Property Finance," it said.
SNS Reaal's banking and insurance activities nevertheless posted a profit of 443 million euros, excluding one-off items.
The bank was nationalised at a cost of 3.7 billion euros on February 1, including through expropriating shareholders and subordinated bond holders.
SNS Reaal was considered a systemically important bank, meaning it is too important to be allowed to go bankrupt.
The group's property subsidiary is to be isolated from the rest of the company's activities ahead of presenting a restructuring plan to the European Commission before August 22.
© 2013 AFP